The last step to exit the Memorandum

The last step to exit the Memorandum

The final step towards the completion of the Memorandum for Greece is expected to take place tomorrow in Luxembourg, where the eurozone finance ministers meet. The aim of the meeting is to determine the additional Greek debt relief, the way the country will proceed in the post-memorandum period, but also the completion of the fourth evaluation with the subsequent approval of the last tranche of the program.

However, because there is much talk about the post-memorandum surveillance, the monitoring mechanism of the Greek economy does not include any commitment to new measures, State Secretary and government spokesman Dimitris Tzanakopoulos said, describing as “historic” tomorrow’s Eurogroup meeting, noting that “Several newspapers and sites have rushed again to speak of a fourth memorandum, but the content of the text they publish denies them categorically and ridicules them. Whoever reads it can realise that it contains no commitment whatsoever to new measures”.

Inside the Memorandum of Understanding, it is expected that the possibility of raising the minimum wage will be included, while there will be a provision for our country to continue its efforts to modernize the social welfare system. It will also include, on the basis of an earlier publication of ‘Kathimerini’, the opening of at least 120 primary care centers by the end of 2018 and 240 by the middle of 2020.

Debt measures

Very important for the future is going to be the magnitude of the lengthening of loans as one of the individual debt decisions: According to the latest information, the extension of the repayment time of the second EUR 131 billion loan by the EFSF is expected be close to 9 years. From then on, there will be a security cushion from the unallocated resources of the third program that is expected to be close to EUR 15 billion, as the last installment of the program and a return of the European Central Bank’s profits to Greek bonds, which is estimated at EUR 12 billion, and which will probably be returned in disbursements and be associated with some kind of prerequisites. As mentioned in the above-mentioned text, disbursements could be made in equal annual installments (about 1.2 billion) in June each year, or could be spread over two six-month sub-tranches in June and December.

As for the next day for the IMF, it will remain as “technical adviser”. Beyond that, part of Greece’s debt (11 billion) will be bought out by the ESM, with the direct effect of lowering the interest rate on the country by more than two percentage points.

In this way, the Fund is expected to publish a positive analysis for Greece, regarding the sustainability of the Greek debt, giving a positive signal to the markets./IBNA